As a young engineer in the late eighties I was part of a team tasked with the introduction of just in time (JIT) at a medium sized manufacturing company.
Following a highly successful shop-floor implementation, combined with the development of a hybrid material requirements planning (MRP)/JIT control system, the company achieved startling improvements: a 65% reduction in work in progress levels, an 80% reduction in large containers, a 50% increase in productive assembly shop area and improved stock accountability.
The project also had a number of intangible benefits, such as improved quality, flexibility and working conditions, and increased sales, profit and product range diversification.
To achieve these benefits we picked up on those elements of the Toyota Production System that seemed appropriate, while retaining Western manufacturing ideas such as MRP and short payback periods.
However, unlike some implementations of JIT and lean thinking, we also recognised that the workforce was the major driver of change, and took them on the journey with us, through training, involvement, and communication.
It is no surprise to me then, that lean thinking is currently enjoying a come-back, of sorts, in the public sector. I'm more surprised that it has taken this long. I believe the major reason why it fell from grace in the first place is that Western organisations failed to understand the fact that the workforce is not just part of the solution - they are the solution.
So the public sector is now switching on to lean, but is the deep understanding of lean as a philosophy that is required for success present in modern lean thinking?
I believe that private sector organisations still have much to teach practitioners in the public sector. The main reason for this is that lean is now better understood as a holistic approach rather than just a set of tools.
A lean exemplar: The Unipart way
To illustrate how far companies can go down the lean route, consider the example of Unipart. As a major warehouse and supply chain management operation they handle levels of complexity that would normally send a CEO running to the nearest software house for a ‘hard' solution.
Unipart ships millions of components worldwide, dealing with thousands of product lines. To address their operational challenges they have developed a continuous improvement approach that means their operations are constantly changing to meet environmental, customer and technological demands.
I was fortunate enough to visit a Unipart site recently, and was instantly impressed. It's not just the standard of housekeeping, or the level of activity, or the working conditions that are instantly noticeable - the amount of information available on the shop-floor is staggering.
Unipart uses ‘comm cells' - dedicated notice boards - to present performance and project information to the workforce. But comm cells are much more than just glorified posters - these are active meeting areas, where teams gather every day to discuss performance, problems, and opportunities.
The comm cells have a uniform structure throughout the company, providing a rigorous change management process at all levels, from the offices, to management and to the shop floor. They have a structure based around an understanding of end to end processes, and the role that each team member plays.
The comm cells deal with a variety of projects, from small scale changes to process, dealt with through quality circles, to major projects. The teams can call on technical and engineering support where necessary. Consequently, small issues are dealt with in days, rather than weeks, and even large scale projects can be progressed rapidly, as the project teams consist of representatives from all the necessary groups.
The activity of the comm cells is not haphazard improvement; they are part of a strategy deployment process that starts with the vision of the CEO.
This is devolved down through the organisation by deployment matrices - a recursive hierarchy of strategy development that informs both action and measurement at each level.
The upshot of this is that every employee knows exactly what impact they are having on the bottom line, on a daily basis - with the attendant improvement in engagement that this brings.
Unipart would be the first to admit that not all of its employees buy into the Unipart way. They estimate that around 70% of the workforce does, and that this majority is sufficient to create a Continuous Improvement culture. Due to the level of support and training though, it would be difficult to find an employee that does not at least know the principles and the tools.
Training is a continuous activity too, with twenty minute training slots delivering bite sized chunks of knowledge at regular intervals throughout the day - training matrices allow current skill levels to be tracked and shortfalls addressed.
The most important principle to Unipart is that their people provide them with the ability to change and develop - in return the company has a policy of redeploying staff released by process improvement rather than cashing in on short term payback.
The logic of this is obvious - when you have spent many years developing not just the technical on-the job skills of an employee but also the skills in lean, creativity and interpersonal relationships, would you waste that by throwing it out to other employers?
The exceptional operational performance of Unipart is gained through rigorous study of its customers needs, building relationships with suppliers and vendors, ‘intelligent' outsourcing and above all, process knowledge.
But the people driving change remain the employees doing the job at the coal face - the real ‘subject experts'. Their jobs are built around providing them with the time to develop processes, for housekeeping, and for personal growth. None of this is unusual to practitioners of lean thinking in the private sector.
These ideas are supported by traditional techniques that provide meaningful and appropriate management information - work study is used to plan resources and time schedules, hard forecasting and scheduling is done through ICT, and engineering resources provide support for action supported by sound business cases.
Waste reduction
Underlying all of this is a constant awareness of the need for constancy of purpose - constantly striving for better performance - and the need to remove all forms of waste from every process. In lean terms, waste generally falls into eight categories:
- Transport
- Inventory
- Movement
- Work in progress
- Overproduction
- Overprocessing
- Defects
- Squandered talent
Unipart attacks all of these categories, but especially strives for reduced batch sizes, reduced lead-time and low inventory. The public sector can sometimes struggle with translating these wastes into the context of service delivery, but please believe me; all of these forms of waste exist in all organisations.